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Money may very well buy happiness. According to a new study by U.S. labor and employment researchers, dissatisfaction with the size or fairness of your paycheck is a key driver of work-family conflict.

The study, published in the Journal of Organizational Behavior, was conducted by Devasheesh P. Bhave, a Concordia University professor, and Amit Kramer, a professor at the University of Illinois, who looked at the relationship between pay levels, pay satisfaction and conflict at home. They discovered that employees who are happier with their pay report lower levels of work-family conflict.

Kramer says pay is relative. Once a worker makes enough to cover their basic needs, their perception shifts from what the amount allows them to physically purchase to social reference points like the work-life trade-off and where they stand in relation to their peers. "It becomes my pay compared to others,” he says. “My pay compared to the effort I invest, and my pay compared to the things I give up and miss in life for the opportunity cost of working.”

While organizations typically believe that actual pay (vs. employees’ social understanding of pay) is the top incentive for employees, Kramer believes it’s much more complicated. For example, a pay raise offers only a temporary rise in pay satisfaction levels. Over time, most employees regress back to initial satisfaction levels, as they compare the new salaries to coworkers’ pay or market standards and tally life sacrifices.

The study found that even highly compensated professionals experience increased work-family conflict due to pay inequity among colleagues. This insight may be particularly relevant for professional women, who still face a significant pay gap across all levels, sectors and even job functions in the U.S.

According to a recent report by the American Association of University Women, even when all factors are equal—age, field, education, location and hours worked—men earn significantly more than women just one year out of college. Using the class of 2009 as the study sample, the report found that women working full time earn an average of 82% of what their male peers earn. Some of the pay difference is related to college major—women tend to pursue lower-paying degrees like education—but the researchers found that one-third of the pay gap is unexplained. A year out of school, female teachers earn 89% as much as male teachers, while female business majors earn $38,000 compared to male peers’ $45,000, or 84% as much.

If employers hope to retain talented workers, they may want to reconsider pay fairness within their organizations. Furthermore, Kramer believes that the dissatisfaction derived from the work-life trade-offs may also be eased by company-supported flexible work policies, including paid vacation, flexible work arrangements or telecommuting and compressed workweeks.

"In a time when the boundaries between work, life and family are so blurred with the increased use of technology that allows many employees to work everywhere, anytime, I think employers should consider offering flexible work arrangements to employees who can perform their work off-site and off-schedule," Kramer says. "That type of a flexible policy that would allow all employees—not just those with families—to better balance work, family and life demands as they see fit."